Law and regulation

Audit / FRC publishes revised corporate governance code

The Financial Reporting Council (FRC) has published its revised UK corporate governance code, which it says places emphasis on businesses building trust, with greater board engagement with workforce views and an end to ‘formulaic calculations of performance-related pay’ for executives

Audit / MPs pressure FRC over BHS findings

MPs are demanding the Financial Reporting Council (FRC) provides more details of its investigation into PwC’s auditing of BHS as a going concern prior to the retailer’s sale for £1, now that its previous owner, Taveta Group, has lost a court appeal to prevent full publication of the regulator’s findings

Audit / Bannerman paragraph clarified: what it means for auditors

Following uncertainty about use of the Bannerman clause, ICAEW has issued revised guidance, Technical Release 01/03AAF The audit report and auditors’ duty of care to third parties. Helen MacNeill ACA, senior technical writer at Croner-i, explains the implications for auditors

Audit / Audit updates: July 2018

In our monthly roundup of developments in audit and governance, PwC fined £10m over BHS audit failures, Bannerman third party audit disclaimer guidance updated, KPMG and partner fined £4.5m over Quindell audit failure

Audit / FRC to investigate Deloitte over SIG audit

The Financial Reporting Council (FRC) has launched an investigation into Deloitte’s audit of SIG plc, a UK supplier of specialist building materials to the European market, after the company revealed its profits for 2016 had been overstated by up to £3.7m

Audit / Bannerman guidelines on third-party audit disclaimer revised

ICAEW has issued an update to its guidance designed to assist auditors in managing the risk of inadvertently assuming a duty of care to third parties in relation to their audit reports, commonly known as the Bannerman guidelines

Audit / Editor's comment: breaking up Big Four accounting firms will not work

The Big Four accounting firms are under threat as MPs call for their break up to allow more competition across the mid-tier for the largest FTSE listed companies, but it is important to be totally clear about what the end goal is, says Sara White

Audit / FRC plans £1m additional funds to monitor audit firms, says McLaren

Harsher penalties for poor audit work and tougher monitoring by the Financial Reporting Council (FRC) is necessary given the current lack of confidence in the audit profession. Philip Smith talks to Melanie McLaren, FRC executive director of audit, about the tougher approach

Audit / FRC threatens £10m fines for poor audit work

The Financial Reporting Council (FRC) will implement the recommendations of the independent review of sanctions undertaken last year, which include introducing a fine of £10m or more for seriously poor work by a Big Four firm and greater use of non-financial penalties, as well as the possibility of ten-year bans for individuals

Audit / FRC refutes claims of ‘internal cultural problems’

The Financial Reporting Council (FRC) has taken the unusual step of responding directly to comments made by the Local Authority Pension Fund Forum (LAPFF) in response to the recent corporate governance code consultation, which the regulator says contain ‘a number of inaccuracies and errors’ about its own governance and culture

Audit / Audit materiality, judgments and adjusted errors

Katherine Bagshaw FCA examines the Financial Reporting Council's (FRC) latest audit quality thematic review of materiality and talks to key stakeholders about their views on judgment issues from adjusted errors to performance materiality and profit adjustments, and the UK regulatory requirement to assess materiality

Audit / SEC penalises KPMG, Deloitte and BDO over unregistered auditors

The US Securities and Exchange Commission (SEC) has charged foreign affiliates of KPMG, Deloitte & Touche, and BDO for their involvement in audit work that circumvented the full oversight of the Public Company Accounting Oversight Board (PCAOB), by using unregistered auditors

Audit / Deloitte pays £109m to settle claims over audit failures

Deloitte has agreed to pay the US justice department $149.5m (£109m) to settle claims arising from its audits of failed mortgage lender Taylor, Bean & Whitaker Mortgage (TBW), which collapsed and declared bankruptcy in 2009 and was subsequently found to have been involved in a large scale fraud

Audit / Limited impact of mandatory rotation on audit quality

US and EU mandates regarding auditor rotation are failing to eliminate the ill effect of long auditor tenures with corporate clients, according to research published by the American Accounting Association

Audit / Auditors failing to alert regulator to ‘red flags’ at charities

Auditors are failing to report matters of material significance to the Charity Commission, with analysis showing under a quarter are doing this and most are not meeting the required timescale, despite high profile instances of charity collapse